Winder Farms has grown in delivery

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When Winder Farms recently expanded its grocery home delivery service to Orange County, it didn't have to start from ground zero. The Utah-based company had quietly acquired the Santa Ana-based Rockview Farms grocery home delivery service six months ago for an undisclosed price.

“Rockview had been doing home delivery for more than 20 years,” Winder Farms chief executive Mike Dutton said. “I got to know the owner over the last 10 years. He told me, ‘We're thinking about the next chapter in our lives. Would you be interested in the company?'

“I said, ‘We wanted to go there already.'”

Winder had been looking to expand in the West. In 2006, it ventured for the first time beyond Utah by offering grocery delivery in Las Vegas and Mesquite, Nev.

Dutton, an Anaheim native, had been eyeing Southern California for years. “There are 20 million potential customers from Los Angeles all the way down to San Diego,” he said. Orange County made an appealing launchpad because of its location and demographics.

“There is a large concentration of households with children at home who value fresh, all-natural foods,” he said. “And with 4 million residents in Orange County, we knew that we could build a substantial business.”

Winder plans to expand to San Diego and the Inland Empire in the next several years, Dutton said.

Rockview, with its white delivery vans and trucks, is somewhat of an anachronism – a holdover from an era before consumers flocked to supermarkets and big-box stores for their groceries. Winder had much in common with Rockview. Both originated with milk as their major product, delivered directly to customers' doorsteps.

Rockview had the warehouse, workers, drivers, delivery trucks and vans, routes, vendors and – best of all – a well-established customer base accustomed to getting groceries dropped off on the porch. Most of its routes are in Orange County, but Rockview has been delivering to Santa Monica, Whittier and other parts of Los Angeles County.

Growing bigger

Since acquiring Rockview, Winder has moved the headquarters to an Anaheim warehouse that's six times larger than the Santa Ana facility and put a warehouse management system in place. It deployed to the vans and trucks mobile technology, including GPS navigation and a windshield-mounted mobile device that lets drivers see the list of orders and electronically check off completed deliveries. Winder has hired 40 people, including drivers, in the past six months and plans to increase staffing up to 500 people within five years.

The company plans to nearly double its number of Southern California customers to about 10,000, with about 90 percent of them located in Orange County, Dutton said.

“Winder Farms services appeal to anywhere between 10 and 25 percent of the households in any given neighborhood,” Dutton said. The target market is “anyone who is seeking high-quality, fresh, all-natural products who want to simplify their life by having it delivered to their front door.”

Home delivery of groceries has proven to be a mixed bag for a variety of companies. Webvan went bankrupt in 2001 before Amazon revived it. The types of groceries available nationwide via Webvan are similar to those found in traditional supermarket chains.

AmazonFresh, also a division of Amazon, focuses on artisanal goods and produce from local farms. AmazonFresh has been offering grocery home delivery in Seattle for several years and expanded to select parts of Los Angeles last month. The service is not available in Orange County yet.

Nationally, Skokie, Ill.-based Peapod and New York-based FreshDirect continue to focus their deliveries on the East Coast. In California, startups include LolaBee's Harvest, which is headquartered in Oakland and delivers to San Francisco households.

Supermarket industry consultant David Livingston said the grocery home delivery sector is “a very small slice of the overall grocery market.” The service “is for people who are time-strapped or who can't go to a grocer or don't want to deal with the public.”

Dutton is counting on two changes making home delivery more viable now than a decade ago: E-commerce technology has improved tremendously, and customers are more accustomed to paying for goods online and getting them delivered.

Indeed, e-commerce sales for food increased 16.9 percent to $15.9 billion in 2012, according to a report from Willard Bishop, a research and consulting firm.

Local suppliers

Some grocery delivery companies, including Winder Farms, differentiate themselves by offering goods similar to those found in farmers markets and specialty grocery stores such as Trader Joe's and Mother's Market and Kitchen.

Most of the goods Winder Farms delivers in Orange County are from local vendors, including Picket Lane Bakery in Huntington Beach, which specializes in breads and specialty baked items, and Tanaka Farms in Irvine, known for its seasonal organic produce.

Pam Gressier, 51, wasn't interested in grocery home delivery when a Winder Farms salesman approached her three months ago. “Then he said the magic words: Tanaka Farms,” Gressier said. The Huntington Beach resident knew about Tanaka's produce, having participated throughout the years in fundraisers that involved picking up Tanaka vegetables and fruits every week at her children's school.

Now, Gressier's household gets a delivery of milk, apple juice and organic eggs in addition to the produce box at about 1:30 a.m. every Friday.

Before signing up for Winder Farms delivery, Gressier typically stopped by Trader Joe's for those items. She said she's paying for the convenience of Winder Farms as well as quality: “It's one less store” on her grocery shopping trip.

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